Patl TARIFF HEARINGS. THE COMMITTEE ON WAYS AND MEANS, Friday, December 18, 1908. (The committee this day met, Hon. Sereno E. Payne in the chair.) The CHAIRMAN. Is Judge Gary present? (There was no response.) STATEMENT OF MR. ALFRED R. URION, REPRESENTING ARMOUR & CO., OF CHICAGO, ILL. (The witness was duly sworn by the chairman.) Mr. URION. My name is Alfred R. Urion. I represent Armour & Co.. meat packers, of Chicago. I am here, in response to the request of the committee, to be interrogated concerning the duty on hides. The CHAIRMAN. You may proceed with your statement. Mr. URION. I have prepared no statement for the reason that after reading the proceedings I concluded that only those who asked something at the hands of the committee in the readjustment of the tariff filed briefs or prepared statements. Armour & Co. are asking nothing in the readjustment of this tariff. However, I shall be very glad, and I think it is my duty, to give any information I may be able to give on the subject. The CHAIRMAN. Mr. Urion, what the committee desires to have information upon is the question of whether the duty on hides raises the price in this country owing to the limited importations compared with the amount produced in this country; and if it does not increase the price in this country, who gets the benefit of the tariff? Mr. URION. Well, every steer has a hide on it, and that hide must have a value on the steer in the hands of the farmer as it has a value in the hands of the packer; and I think every farmer knows that. The average value of a hide, or the average of a hide, is about 6 per cent of the total of an animal. As you know, the edible parts of a of the hide, the tallow, and w only about 57 per cent. The other 43 per cent is made up as offal. Of the 43 per cent, the hide is the most vable part; and, as I say, about 6 per cent. The average weight of a hide is from 60 to 70 pounds, green. a fair average is, perhaps, 65 pounds; and that hide is to the farmer, approximately, on the present market, $6.50 to Of course that varies with the weight and size of the animal. I suppose worth $7. "The CHAIRMAN. Packers buy the cattle on the hoof in large quan tities and slaughter them and lay aside the hides. They do not put them on the market every day when they buy the cattle, but they hold them for a better market? Mr. URION. Well, it takes about thirty days to prepare a hide in the salting and curing of it; and hides, of course, are not perishable, while most of the other part of the animal is perishable. The hides are sold according to the market demand, and it fluctuates, of course. A year ago hides were down as low as 8 cents. To-day they are up as high as 14 or 15 cents. At that time the cellars of the packers were overflowing; there were no buyers, and, of course, as the demand increased the supply has decreased. The CHAIRMAN. At that time the duty cut no figure whatever in the price of hides, when the cellars were full? Mr. URION. Well, but the duty cuts a figure, if it cuts it at all, at the time of the purchase. The slaughtering of cattle and the handling of the product that comes from a steer is of course fluctuating. It takes a week or ten days to get the edible part of that on the market. We may buy to-day on the Chicago market, as an example, and it will be probably ten days, certainly a week, before that beef, the edible part, gets to the market. The parts manufactured into sausages and other products are more likely to be a month. When the buyer goes on the market to buy these cattle he is in competition with from 150 to 200 buyers in the Chicago yards. He buys them, expecting of course to be able, so far as his judgment goes in judging the markets, to make a profit. It often happens that the beef is sold at a loss, and if the by-products make no profit there is a total loss on the purchase, which often happens. The CHAIRMAN. Now, these buyers do not buy direct from the farmer? Mr. URION. They buy through commission merchants, to whom the raisers, the producers, ship their cattle for sale. The CHAIRMAN. They ship to the commission merchants and the commission merchants sell to your buyers? Mr. URION. Sells to any or all buyers there. The CHAIRMAN. One buyer as well as another? Mr. URION. Yes. The CHAIRMAN. You say that there are 150 and more buyers. How many different concerns do they represent ? Mr. URION. Well I can give a concrete example, perhaps, which would be best. The Daily Live Stock Journal of last Tuesday, Tuesday of this week, showed 5,500 cattle received on the Chicago market. The shipments on that day were about 2,100, as near as I can make ont. Mr. COCKRAN. Of live cattle? Mr. URION. Order buyers, buyers who are on the market and buy to fill orders in the East or elsewhere; and the buyers on that market that day were Armour: Swift: Morris; Anglo-American; Hammond, Boore & Co.; S. & S. (that is, Schwarzchild & Sulzberger); Boyd & Lunham: Roberts & Oak: the Western Packing Company: butchers and shippers. I supposed that this gave the total purchase of each packer of cattle. I find, however, that it is not in this issue, although the hog purchasers are there. Mr. COCKRAN. When you say "butchers and shippers" are you speaking of a concern, or of butchers and shippers outside of your own firm? Mr. URION. No; they are referred to as packers, outside of such as Armour & Co. Mr. COCKRAN. And not as one concern? Mr. URION. No. Mr. COCKRAN. The miscellaneous butchers and shippers? Mr. URION. Yes, sir. The average of these buyers outside of Chicago, what we call "shippers," is about 40 per cent of the total run. The other 60 per cent these are round figures-are made up of all the buyers on the Chicago market; and there are many slaughterers in Chicago outside of Armour. The CHAIRMAN. They are all over the country. Mr. URION. It may be of interest to this committee to know that in the State of Illinois, outside of Chicago, 360,000 cattle are slaughtered annually. The CHAIRMAN. It is stated that about 13,000,000 cattle are slaughtered annually, 5,000,000 by the packers. Do you think that is correct? Mr. URION. No; that was correct according to the last statistics, but those statistics are two years old. It is my understanding and my best information that there are in the neighborhood, or was for the year ending June 30 last, about 17,000,000, of which the packers-and when I say packers I refer to the largest packers of Chicago-killed about a little over 7,000,000. The CHAIRMAN. You think that the appetite of the people has been increased in the last two years, then, to the extent of 4,000,000 cattle, in spite of the hard times? Mr. URION. The consumption of beef is increasing all the time. We are an extravagant people in our eating; the American people want the finest cuts; and the cheaper cuts, which is the barrel beef, and matters of that sort, are exported, where it can be. But, as I say, when we buy the cattle we never know when we will be able to sell the beef. It is largely a matter of business judgment. The CHAIRMAN. When a farmer has an animal ready for slaughter, properly fitted for beef, he must put it on the market or lose money; that is, the longer he keeps it the worse he is off. Mr. URION. He is the worse off to the extent of the feed he puts into it after it is ready for the market. The CHAIRMAN. He is obliged to sell. Mr. URION. The farmer of the present day, with the telephones and the post-office service of the country, is able to get his daily papers and his stock journals, and he keeps pretty well informed on the market; and you can generally figure that they ship at the time they think they are going to get the best market. The CHAIRMAN. When the price is up, every farmer gets that back; every farmer ships what cattle he has, does he not? Mr. URION. Every farmer, like every other man, is trying to sell his product for as much as he can get for it. The CHAIRMAN. Exactly, and when every farmer does that it overstocks the market, and the price goes down. Mr. URION. That sometimes happens. The CHAIRMAN. Does it not always happen? Mr. URION. Not always, because it depends largely on the demand. The CHAIRMAN. Of course the packers are not in the business for their health; they buy when they can buy the cheapest. Mr. URION. Certainly; we expect to make a profit on our business if we can; but as for the profit on any particular part of an animal, I do not believe it is possible to figure it out. The CHAIRMAN. I do not believe it is either. Now, the packer being in business in that way, if there is any part of the animal, such as the hide, that he can preserve without cost, he holds it for the highest price, does he not? Mr. URION. He wants to get as much for the hide as possible. The CHAIRMAN. And that results in his holding it for the highest price? Mr. URION. Hides run into money very fast. Mr. COCKRAN. Please state what you mean by that. Mr. URION. I mean, when hides are stored in the cellar, you are putting a lot of money into them which it costs to carry them; and hides do not fluctuate very much. The CHAIRMAN. I do not take it that these packers are very much cramped for sufficient money to run their business, even in the keeping of hides. Mr. URION. Well, I can only speak for Armour & Co.-I know nothing about the others, and have no authority to speak for thembut I know we find it necessary to borrow money to run the business with. The CHAIRMAN. I do not doubt that, and the banks are glad to loan it to you. Mr. URION. I think our credit is good. The CHAIRMAN. So that they are able to hold their hides for better markets. Mr. GAINES. It was stated a year or two ago that Swift & Co.'s notes were all over the country, the country banks were trying to place them; so it seems that they do, if there is any truth in that report, borrow a good deal of money. The CHAIRMAN. Mr. Urion does not want to go into their affairs. He is speaking of Armour & Co., as I understand it. Mr. URION. I know nothing about Swift & Co.'s affairs. Mr. COCKRAN. I suppose that you get a great deal of paper in the course of your business, or do you deal for cash only in the disposition of the product? Mr. URION. Every purchase made on the market is an auction purchase and spot cash. Mr. COCKRAN. What is that? Mr. URION. Live stock is sold, I might say, at auction, because one is bidding against the other, and it is cash. Mr. COCKRAN. I understand that; but I was asking, however, by way of explanation of Mr. Gaines's question, whether a great deal of your product is not disposed of on time and whether you do not take notes when you sell. Will you kindly explain just the condition? Mr. URION. It is true that a large part of the packers' product is sold on time-thirty, sixty, and ninety days. Fertilizers are sold on the year, sometimes two years. Mr. COCKRAN. When you dispose of these products on time, do you simply make a book entry or take a note? Mr. URION. As a rule, they are open accounts. Mr. COCKRAN. By that what do you mean? Mr. URION. They are on the books; no notes for them. |